It
appears that the period from around Feb.
15 to Mar. 12 will be very interesting for
air and ocean cargo, based on recent comments
from people around the world who spoke on
and off the record.
Transportation sources are expecting and
hoping that trade will be brisk and rates
will remain high.
For ocean, this will be the result of reduced
capacity and higher demand. The air picture
is a bit different, but there are plenty
of signs—despite newly elected President
Donald Trump’s anti-trade pronouncements—that
2017 could be quite positive.
Here, SkyKing lands some comments just as
Chinese New Year (CNY) approaches this weekend.

Air and ocean rates were buoyant on healthy
demand ahead of the Chinese New Year (CNY)
festivities, which officially start on January
28.
Reports from
China suggest that some factory production
lines have already closed down, while analysts
are now suggesting that rising demand for
both ocean and air services ahead of CNY
might continue at above average levels,
when shipments hit full swing again in late
February. Could the rate increases of late
December at sea and in the skies continue
through Q1? It depends who you ask.

Chinese
Ports Build Up

What is clear is that there has been a major
build up of cargo at Chinese ports ahead
of CNY, which could keep rates higher than
usual in February as backlogs are cleared.
And, while finding capacity is not an issue
ex-China for air freight shippers, most
forwarders contacted by FlyingTypers
report healthy volumes and steady pricing
in line with the gains made in Q4.

Rates
Are Up

Lucas Kuehner, Global Head of Air Freight
at Panalpina, predicted air freight volumes
would remain strong up to the start of Lunar
New Year. “Carrier rates are still
higher than usual and last year,”
he added. “After Lunar New Year, we
expect volumes and rates to drop, but expect
a rather strong end to the quarter in March
for Asia-outbound shipments.”
Karsten Michaelis,
Head of Ocean Freight at DHL Global Forwarding
Asia Pacific, said shipping markets had
picked up after Golden Week last October
and DHL had seen strong volume developments
in the weeks prior to the Chinese New Year
across all shipping trades.
“Like
every year, the demand will drop after Chinese
New Year as factories need several weeks
to restart production as their staff are
returning from the long holiday,”
he said. “Shipping lines have adjusted
capacity with blank sailings for every trade
to manage this period. The crucial question
is how fast it takes for the demand to pick-up
again?”

Post CNY Build Up

Daryl Ridgway, Global Head of Ocean Freight
at Panalpina, said ocean demand was currently
“extremely strong.”
He added:
“We expect a significant number of
shipments to be rolled into February, post-Chinese
New Year, due to the current overbooking
situation. Freight rates are high and whoever
pays most secures space from the carriers
right now. The carriers allocate space very
strictly based on previous shipments. After
Chinese New Year, demand will weaken and
rates are expected to start to soften. Some
carriers have already announced blank sailing
programs for this period to keep pressure
high. Further disruptions are likely in
March because carriers will realign their
vessels before new alliances commence operations.”

Other
Voices

However, Paul Tsui’s take on CNY was
very different to many of his peers. The
managing director of forwarding and logistics
operator Janel Group and the immediate past
chairman of the Hong Kong Association of
Freight Forwarding and Logistics and the
Federation of Asia Pacific Aircargo Associations,
he said many factories in China had already
closed down production lines this week,
resulting in “quiet” demand.
He said air
freight demand out of Asia had been “moderate”
in recent weeks and space plentiful.
“For
ocean demand before CNY, space is very tight,
but I expect some space will be released
by some shippers next week due to overbooking
of space,” he added. “We expect
it to be very quiet until the second week
of February, and demand will be limited
until March,” Mr. Tsui said.Sky King

Asked to submit
a report card on 2016, Volga-Dnepr Group’s
Marketing & Sales Senior Vice President
Robert van de Weg puts it on the line:
“2016
was a challenging year. We lived through a
long period over the summer where supply outstripped
demand, but I am pleased to say the peak season
was very strong for us, so the year ended
on a high note.
“In many
respects, given the volatile nature of world
trade, it is actually rewarding to see that
we can manage our way successfully through
stormy times by working closely with our customers
and suppliers.
“Fair
weather sailing is easy, but 2016 has definitely
not been like that,” Robert declared.

2016
In Review

“Now with
the year in the rearview, we want to thank
all of our customers around the world that
have once again stood by AirBridgeCargo and
Volga-Dnepr Group! We continue to grow and
modernize our Boeing 747 fleet and increased
our network in places where our customers
asked us to support them.
“I hope
we have demonstrated our commitment to being
a high quality, long-term partner to our customers
and this will remain our focus in 2017.
“Thanks
to their great support, 2016 is AirBridgeCargo’s
13th consecutive year of tonnage growth.”

Onward
Into 2017

“Key for
us,” Robert insists, “is to keep
the momentum we have.
“We are
a developing company and our customers can
see and are attracted by that.
“ABC needs
to keep the ‘momentum’ rolling
along.
“Success
breeds success as long as it does not lead
to a company becoming complacent or arrogant,
and that’s the last thing we want to
become.
“We know
we have to earn the support of our customers
by providing capacity when and where they
need it, by being competitive, and delivering
the best level of service.
“Service
recovery is also important. If there is ever
an issue, our customers want to be confident
we will fix it quickly so it doesn’t
impact them. I hope we are building a reputation
as an airline that is constantly willing to
learn and improve, and that is always listening
to its customers.
“During
2016, we demonstrated our ability to put capacity
into markets where our customers need more
lift and we will do that again in 2017.
“It all
comes down to not only understanding what
customers want, but also having the ability
to do something about it.”

Products
& Operations

“We have
worked very hard to earn the confidence and
trust of our customers so they believe in
our operating capabilities and know we will
deliver the level of service they require.
“I hope
we are now seen as a professional outfit:
operating on-time with a young fleet and growing
network, supported by a knowledgeable and
capable group of people with a good track
record of running airlines.
“When
you have earned that reputation, customers
are much more willing to support your products
and services.
“It is
essential for us now to continue developing
specific products for important segments of
the air cargo market, such as pharmaceuticals
and off-sized cargoes.
“Furthermore,
we aim to get even closer to customers in
specific segments where we have already earned
a lot of customer loyalty, such as aerospace
and oil and gas.”

Salutes
Forwarders

“Freight
forwarders used to be called ‘agents,’
but that’s almost derogatory nowadays
because it doesn’t truly reflect the
critical role they play.
“Freight
forwarders have earned their place in the
supply chain and are the vital link between
shippers and asset-based providers such as
airlines and shipping lines.
“ABC is
doing all we can to work as closely as possible
with our forwarder partners while, if required,
keeping an open eye on the service requirements
of the ultimate shippers that are in need
of specific services.
“Over
the last 12 years, we have demonstrated we
are a quality carrier. We are easy to access
and flexible in meeting customer requirements.
“Plus,
we are a growing carrier both in terms of
capacity and in terms of our service portfolio,
which is absolutely based on the needs of
our customers.
“Through
our unique ‘Cargo Supermarket’
concept we can and do offer our customers
a range of services utilizing our various
aircraft types (B747, AN-124, IL-76, B737)
as well as engineering and prviding logistics
solutions for their most complex shipments.
“That
makes us unique and means we can also offer
the most efficient solution for their cargo
delivery needs.
“We aim
to capitalize on this more and more—it’s
a key objective of our commercial strategy
to have customers benefit from this.
“I think
our customers understand this because their
support has been phenomenal. In 2004, for
example, AirBridgeCargo carried 17,000 tons
in its first year of operations.
“By the
end of 2016, we had flown well over 500,000
tons across our global network in Europe,
North America, and Asia, so our customers
must feel we are a valued partner.”

Succeed
The Need

Taking an inward
look, Robert declared:
“We need
to develop more services for specific segments
of the market, plus we need to continue to
widen our network coverage.
In Asia we are
strong, but, for example, on transatlantic
routes we can do better.
“Plus,
we always need to be looking for ways to get
even closer to our customers and understand
them even more so we can work together to
identify where it is we can help them in terms
of services and pricing.”

How
Can Air Cargo Be Improved?

“Legally
approved initiatives within TIACA and IATA
are appreciated e.g. implementation of harmonized
customs rules and digital procedures is important.
“Plus,
we really like CargoIQ as a quality measuring
platform.
“However,
confronting air cargo, in my opinion what
is most important is for competition to drive
innovation, and individual companies must
rely on their own capabilities to progress,”
Robert van de Weg concluded.
Geoffrey

SmartKargo
went live to support cargo business processes
for Wingspan Group, which represents Air
Asia India.
“SmartKargo provides
all necessary software to perform complex
air cargo functions literally out-of-the-box,”
said Wingspan Group Chairman & Managing
Director Neeraj Rathi.
Jay Shelat (ex-AA Cargo,
Jet Airways), who today serves as EVP Sales
& Marketing for SmartKargo, added:
“SmartKargo is built
upon the world’s leading global cloud
infrastructure, Microsoft Azure.
“Because the Azure
platform is continually evolving with emerging
technology, the SmartKargo solution also
updates with the platform, which means the
solution is always cutting edge.”
More: www.smartkargo.com

As a former
KLM Cargo employee, reading the articles in
the latest issue, Meurer,
Ancher
and Krems
was great !!
Thanks.

Barry Medwed
Director of Key Accounts
Consolidated Aviation Service

Geoffrey,

The article on Jan
(Meurer)
was well done and brought back fond memories
of business/social dealings with him when
he was THE KLM Guru . . . Jan was always a
treat to do business with . . . A true character
with class . . . Please give him my regards
. . .
Still enjoy seeing
your son each Sunday . . .

Brown
Brown Wilder
ACI Air Cargo Inc. (Retired)

Thank
you Geoffrey for the article on Jan (Meurer),
a true professional, a true friend.
I'll always cherish
the time I had the fortune to share time
with him during the numerous occasions
that our airline life gave us.
Cheers . . .

Isaac Nijankin
Varig Air Cargo (Retired)

Editor's Note:
Both Brown Wilder and Isaac Nijankin were
early stalwarts at TIACA and worked diligently
to help establish TIACA back when the future
of that organization hung by a thread.

Hi Geoffrey,

Thank you. I wish
that 2017 will be a fantastic year for you
and Sabiha.
Amazing how much
credit you give to people while you are the
people that have done more for the industry
than any one of us.
But that’s
life.
Hope to see you soon.